KBB industry may be flouting competition law

28 Jan, 16

Ultra Finishing and Foster under investigation

The Competition and Markets Authority (CMA) has issued statements of objection to bathroom fitting supplier Ultra Finishing, as well as to commercial refrigeration manufacturer Foster.

Each is alleged to have introduced a minimum advertised price for internet sales, which limits the ability of retailers to make online sales below a specified price.

The CMA alleges both cases were a form of resale price maintenance and infringements of competition law.

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Findings of the CMA are provisional and no final conclusion has yet been reached regarding whether there has been a breach of competition law.

Any business found to have infringed the Competition Act 1998 could be fined up to 10% of its annual worldwide group turnover. In calculating financial penalties, the CMA takes into account a number of factors including seriousness of the infringement(s), turnover in the relevant market and any mitigating and/or aggravating factors.

The CMA currently has 12 open cases, including an investigation into anti-competitive practices in the bathroom industry opened on August 28, 2014. Ultra Finishing is part of that investigation.

CMA director Ann Pope said: “The internet has driven innovation in retail markets. Where ‘traditional’ businesses operating through bricks and mortar shops face intense price competition form online sales, suppliers may be tempted to respond by introducing practices, like minimum advertised prices, that restrict such competition. 

“Retailers should be free to set their own sales prices online. This drives competition among rival retailesr because they compete to attract consumers who are using the internet to shop around for the best deals.

“The CMA will carefully consider representations from the parties before reaching a final decision on whether the law has been infringed.”

Ultra Finishing has issued a statement, which reads: “As you may know, there is an ongoing investigation by the Competition and Markets Authority (“CMA”) into historic concerns within the bathroom fittings sector.  We have been one of the companies involved in that investigation and continue to engage with the CMA in that regard. 

The CMA have decided as part of their next steps in the process to send what is called a statement of objections to Ultra. The CMA have identified some provisional competition law concerns about some aspects of historic practices.  We are invited to respond to the CMA as part of the ongoing process and are fully prepared to provide that response. Ultra Finishing Limited will continue to engage in discussion with the CMA. it would not be appropriate for us to comment further at this point.” 

A statement provided by Foster read: “Foster has noted the provisional conclusions of the Competition and Markets Authority outlined in its press release this morning. Foster is committed to complying with relevant competition law and is cooperating fully with the Competition and Markets Authority. Whilst the investigation is ongoing Foster will make no further comment at this time.”